PEARSON JOURNAL OF SOCIAL SCIENCES & HUMANITIES 2020

FINTECH VS TECHFIN: A NEW FORM OF COOPETITION, DETAILED

COMPARISON BETWEEN FINANCIAL TECHNOLOGY FIRMS

Ovais Vohra
Aydın University
[email protected]

Abstract
Nowadays, digital trans formation is experienced in many areas of
business life. The digitization process has accelerated especially after the
Covid-19 pandemic. Digitalization has covered all functions of an enterprise
as of today. Finance comes first among these areas. Huge advances in
technology have also affected the financial world, and today a new business
model called financial technologies has emerged. Although financial
technology companies are relatively new, competition in this area is extremely
destructive. In the field of financial technologies, banks currently providing
classical banking services and fintech and techfin companies that produce
customized solutions for their customers are in competition. Each actor has
a different strength and weakness in the competition.
For instance, fintech companies meet customer needs better than banks
because they provide customized service areas, but since they are relatively
small organizations, customers may hesitate to involve with large amount of
transactions. Although Techfin companies are larger and have more reputable
brand value than fintech companies, they may also be insufficient to produce
innovative solutions in the financial field when compared to fintechs. Banks,
which are the most established players in the sector, fall behind in producing
innovative services compared to fintech and techfin companies despite of their
relatively larger asset structure and strong brand values.
In this study, the digitalization process in the sector is examined in detail
and these 3 actors in the financial technologies sector and their relations are
analzyed in detail. As a result of the analysis, the survival of companies
operating in the field of financial technologies in the future depends on their
successful cooperation to complement each other's shortcomings instead of
competing with each other harshly.
Keywords: Fintech, Techfin, Digitalization, Financial Technologies,
Coopetition, Banking System.
JEL Codes: G20, G21, G29

FINTECH VS TECHFIN: YENİ BİR İŞBİRLİĞİ ŞEKLİ, FİNANSAL

TEKNOLOJİ ŞİRKETLERİ ARASINDA AYRINTILI BİR KARŞILAŞTIRMA

Özet
Günümüzde dijital dönüşüm, iş hayatının birçok alanında
gözlemlenmektedir. Dijitalleşme süreci, özellikle Covid-19 salgınından sonra
giderek hız kazanmıştır. Dijitalleşme, bugün itibariyle bir işletmenin tüm
işlevlerini kapsamış durumdadır. Finans alanı da bu alanların başında
gelmektedir. Teknolojideki büyük gelişmeler finans dünyasını da yakında
etkilemiştir ve bugün finansal teknolojiler adı verilen yeni bir iş modelini
ortaya çıkarmıştır. Finansal teknoloji şirketleri nispeten yeni olmalarına

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rağmen, bu alandaki rekabet son derece yıkıcı olarak ifade edilebilir. Finansal
teknolojiler alanında şu anda klasik bankacılık hizmetleri veren bankalar ile
müşterileri için özel çözümler üreten fintech ve techfin şirketleri rekabet
içindedir. Yarışmada her bir oyuncunun farklı bir güçlü ve zayıf yönü
bulunmaktadır.
Örneğin, fintech şirketleri, özelleştirilmiş hizmet alanları sağladıkları için
müşteri ihtiyaçlarını bankalardan daha iyi karşılarlar, ancak nispeten küçük
kuruluşlar oldukları için müşteriler onlarla büyük montanlı işlem yapmaktan
çekinebilmektedirler. Techfin şirketleri, fintech şirketlerinden daha büyük ve
itibarlı marka değerine sahip olsalar da, fintech'lere kıyasla finans alanında
yenilikçi çözümler üretmek konusunda yetersiz kalabilmektedirler. Sektörün
en köklü oyuncuları olan bankalar, görece daha büyük varlık yapıları ve güçlü
marka değerlerine rağmen, fintech ve techfin şirketlerine göre yenilikçi
hizmetler üretmede geride kalmaktadır.
Bu çalışmada sektördeki dijitalleşme süreci detaylı bir şekilde
incelenerek finansal teknolojiler sektöründeki bu 3 aktör ve ilişkileri detaylı
bir şekilde analiz edilmiştir. Analiz sonucunda finansal teknolojiler alanında
faaliyet gösteren firmaların gelecekte hayatta kalabilmeleri, birbirleriyle yıkıcı
bir şekilde rekabet etmek yerine birbirlerinin eksikliklerini tamamlayacak
başarılı işbirliğine bağlıdır.
Anahtar Kelimeler: Fintech, Techfin, Dijitalleşme, Finansal
Teknolojiler, İşbirliği, Bankacılık Sistemi.

1. Introduction
Incredible changes are taking place in the finance world in 3 major fields:
Expectations, Regulation and Technology. Consumers want to be able to
access customized services whenever and wherever they need them. There are
3 important determinants of customer-specific service. Continuity of Service,
Flexible and Customization, and Providing Service Customer’s location
oriented. An example of customer expectations is the ability of customers to
make EFT even at night, and the use of mobile banking in business
intelligence.
The change in the regulatory environment is in a way that will support
the diversification of financial institutions and the spread of transparent and
open structures.
Innovations and opportunities brought by technology reveal models that
deeply affect business life and ways of doing business. It is possible to
consider technology under 3 parts. These are Traditional Technologies
(Mobile, Cloud, Internet of Things), Decentralization (Cryptocurrencies,
Blockchain, P2P, API) and Artificial Intelligence (Chatbot, Speech recognition,
Machine learning, Robo-consultant). As a result of this rapid changes
occurred in technologies environment, currently there is a significant interest
to these companies that engage in financial technology. Particularly, in
cryptocurrencies, the investors are placing their funds to these companies
through the Initial Coin Offerings (ICOs). As a type of crowdfunding ICO is a
funding and donation mechanism used by ventures through Bitcoin and
Ether to fund new and structured venture projects (Ozyesil, 2020: 286).
Nowadays it has been noticed that technology has entered strongly to
many sectors, it includes industry, education, finance, health... etc. and the

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engagement of these sectors and technology has known a huge increasing

after the appearance of Covid-19 pandemic. The Ministry of Development
focuses on 2 main topics in the 10th and 11th Development Plan. The first is
the expansion of the financial services all over Turkey (nation wide), and the
second is increasing the number of companies will promote these financial
services. There are one of the main motivations to make this research about
fintech and techfin comparison.
In this study, about fintech and techfin concepts following subject will
be discussed: In second part, digital transformation and finance, history of
transformation, legal framework of transformation and the advantages vs.
disadvantages of digital transformation will be explained. In part 3, recent
studies and their suggestions included in the literature also will be discussed.
In part 4, a comprehensive Techfin and Fintech compassion is made with
indicating the services that they do and their importance. Basic different and
common points are clarified under the comparison of fintech and techfin. In
conclusion part, it is found that fintech and techfin firms are not competitor
to each other rather they are completing each other.

2. Basic concepts
2.1 History of progress of transformation
The world is changing faster than ever. The Internet of Things (IoT),
mobility, cloud, big data, augmented reality, block chain, and social media
are driving companies to the next level of digital customer engagement and
IT-enabled business processes, products, and services. In virtually every
industry, digital technologies are bringing about unprecedented
transformation and changing our work and lives in ways, we have never
anticipated.
Digital transformation is an actively discussed topic these days, but this
was also true in the late 1990s and again in the mid-2000s. We started to
computerize processes almost 30 years ago, and we have already implemented
digital activities in our organizations.
First, digital channels, or websites, connected companies and their
customers. After that, digital processes emerged to support customer
interactions. As companies’ digital ambitions quickly grew, they soon needed
dedicated digital teams to manage new social and mobile channels. This
enabled organizations to leverage digital data on their own activities and
interactions. Connected to customers, suppliers, and other stakeholders,
companies realized that they operated in digital networks.
To make better use of the vast amounts of information, companies
started to connect all processes and devices into networks. Seeing potential
in connectivity, organizations focused on digital platforms connecting all
system players rather than the traditional method of doing business through
intermediaries. Companies began to experiment with new digital ways of doing
business, trying to leverage data more effectively, create greater agility, and
retain talent.

2.2 Legal framework of digital transformation

Practically all digital transformation initiatives of today are being built
on so-called 3rd Platform technologies and solutions, including mobile, cloud,

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big data/analytics, and social technologies. Innovation Accelerators—IoT,

robotics, 3D printing, next-generation security, and others—depend on the
3rd Platform and expand its capabilities. In the rapidly scaling digital
marketplace, they have become the key growth drivers for many companies.
Digital technology is integrated into every aspect of today’s companies,
and those businesses that fail to set an efficient digital strategy and maximize
the impact of digitalization risk being left behind. The Russell Reynolds
Associates survey shows that media, telecom, and consumer financial
services were the most disrupted sectors in 2015, with retail and technology
close behind.
Digital technologies transform industries in completely new ways,
offering fundamental improvements in personalization, efficiency, and safety.
However, we have only started exploring the digital opportunities, and this
digital transformation has only just begun. In the near future, digital
innovations and initiatives will take us into new transformation phases,
bringing exciting changes to our lives and reshaping the global economy.
Clearly, all of the digital transformation predictions have one thing in
common: change. Digitalization is creating more opportunities than ever
before, but at the same time, it requires a new mindset and readiness to
embrace change. Both companies and individuals need to accept the new
reality of constant change to find a place in the developing digital world.

2.3 Advantages and disadvantages of digital transformation

Advantages of the digital transformation are outline in below as follows
• Makes Your Business More Competitive:
According to the IDG’s 2018 Digital Business research, 44% of
enterprises already implement a digital-first business strategy.
This means your competitors have probably already adopted new
technologies.
In addition, every new player in the market is focused on successful
digital adoption in order to put their start-up at the forefront of their niche.
More conservative competitors will get left behind.
Well-suited technologies allow your business to be more flexible, efficient,
and productive, improving ROI. As far as digital transformation pros & cons
go, this is a compelling argument for making technology adoption a priority.
• Makes Your Employees More Productive
Digital transformation begins with your employees; if their performance
is improved by effective use of technology, the performance of the overall
enterprise improves.
For both white and blue collar workers, automatization of production has
historically yielded positive results. Assembly lines, robotization of processes,
and AI have all freed up time for more intellectual work for humans.
Modern technology is designed to optimize office processes. For instance,
CRMs were originally created to combine and facilitate accounting and client
management, while minimizing repetitive tasks in marketing and sales.
These accelerators exist to give employees the ability to fulfill their
potential. Even simple programs like messengers or cloud services can boost
workers’ performance just by facilitating access to information.

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In fact, according to The McKinsey Global Institute, the average

productivity of employees increases by 25%.
• Allows You to Provide A Better Customer Experience
One of the fundamental principles of business management is to deliver
an exceptional customer experience (CX).
The average US citizen spends about 12 hours a day in the digital space.
Mining information, getting entertainment, and spending money are just a
few of their activities.
The obvious answer is to be there in that space for your clients,
facilitating their path to purchase with a seamless user experience of your
digital platforms.
Digital transformation allows organizations to meet their customers’
needs better through clever use of technology.
Whether it’s through a better website, new app, or other digital offering,
smart technology coupled with rapid customer adoption is the key to CX
success.
Advantages of the digital transformation are outline in below as follows
• Never-Ending Change
As far as the negatives of our digital transformation pros & cons goes,
this one is unavoidable. Technological progress is, for the foreseeable future,
unending. That means your digital transformation must be an ongoing
process. The digital market is fast and furious in its evolution. According to
Forbes, the governing trend in 2019 is steep growth in the IT industry. This
should come as no surprise to anyone.
When new solutions based on scientific breakthroughs invade the
market you have to be ready quickly for further digital transformation.
• Effective Implementation of New Technologies Takes Time
While most of us already know how to use smartphones or send emails,
adopting new enterprise management solutions takes a little more time and
effort.
The Telegraph reports that one of the most pressing issues for
entrepreneurs is finding the right technology. Indeed, implementing too many
optimizing platforms can result in chaos.
Finding the most suitable tools for your business takes research and
testing time. There is the adoption time it takes to train employees how to use
them effectively. For this, a Digital Adoption Platform (DAP) is highly
recommended to accelerate time to competency.
• Can Cause Upheaval & Uncertainty for Employees
The burden of constant digital changes falls onto the shoulders of your
employees. While 87% of employees claim they are ready to learn new skills,
every person has a different tolerance for stress factors.
This is why a personalized approach is required when training employees
to use digital tools.
Using traditional training methods, this is prohibitively expensive and a
logistical nightmare. However, using a DAP, employees can receive
personalized training in real-time, without leaving the system they are using.
In this age of constant digital upheaval, it is important to provide workers
with the support they need to feel motivated to give 100% and feel secure in
their jobs.

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3. Literature Review
Susan Moore (2017), banks have subjected to lots of noise caused by
fintechs whether they are going to deplete all traditional financial institutions
or not. Time showed that fintechs were not as talented and threatening as
expected. They are lack of some key elements like experience, capital and
customer base to challenge traditional financial institutions.
Fintechs competitive advantage mostly comes from their agile structure,
customer centric approach and loose regulation environment around them.
Despite their competitive advantages, most fintechs face serious challenges to
scale up their businesses. Lack of customer trust, low number of customers,
low brand recognition, weak capital and ineligibility to handle regulatory
issues are some of them. On the other hand, banks have all the necessary
skills that fintechs do not have but banks have some shortcomings too.
Mutually complementary lack of skills and advantages make them perfect
candidate for collaboration. Banks close the gap of capital and experience of
the fintechs, and the fintechs close the gap of lacking customer centric
perspective of banks. Cooperation will give both parties chance to overcome
their weaknesses and strengthen their position.
According to PwC, 82% of the financial services expect to make
partnership with fintechs within the next three to five years. Financial
institutions understand the fact that disruption is inevitable and fintechs
provide great opportunity to cope with this inevitability.
A new kind of threat started to emerge from the technological world:
techfins (or in some cases bigtechs). Techfin is a combination of two words:
technology and finance. Techfins are companies that produce technology as
their core businesses. Alternatively, they use their technologies to provide
financial services. Unlike fintechs, they have capital, enough experience and
customer base. Moreover, the vast customer data and the ability to analyze
this data give them a great advantage over fintechs and financial institutions.
Even though there are plenty of techfins exist in the sector, biggest techfins
are named as GAFA (Google, Apple, Facebook and Amazon).
Appearance of techfins in financial world is not just a threat for
traditional financial institutions, it is also posing threat for fintechs. They
have the ability to combine the advantages of both fintechs and traditional
financial institutions. Fintechs and banks have no other choice than making
collaboration. If non-traditional fintechs and traditional financial institutions
can unite their strength together, they can find chance to survive from techfin
invasion of financial world.
Despite general trend is through collaboration direction, there is no clear
guideline how to evaluate and integrate fintechs in banking services.
Desai (2015), the Evolution of Fintech he mention that the word fintech
is formed from the abbreviations of two words, namely financial and
technology. Officially, World Economic Forum defines fintechs as “companies
that provide or facilitate financial services by using technology. In its current
form, fintech is marked by technology companies that disintermediate formal
financial institutions and provide direct products and services to end users,
often through online and mobile channels. Another definition for fintech by
PwC (2016a) is “a dynamic segment at the intersection of the financial services
and technology sectors where technology-focused start-ups and new market

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entrants innovate the products and services currently provided by the

traditional financial services industry. As such, fintech is gaining significant
momentum and causing disruption to the traditional value chain” .Further
Gartner defines as “fintechs are startup technology providers that deliver
emerging digital technologies that approach financial services in innovative
ways or can fundamentally change the way bank products and services are
created and distributed, and generate revenue. The term may also refer to the
technologies these providers offer. Other definitions such as fintech integrates
finance and technology together, traditional financial structures combined
with today’s technology-based processes and simple one fintech refers to the
application of technology in financial service.
Philippon (2016), discussed the potential effects of the fintechs in
financial environment. He found that financial services become expensive so
that new entrants should enter the market to reduce cost of the services. He
also stated that current regulations are under the pressure of political
economy and coordination costs. He concluded that fintechs will bring deep
and big changes to the financial markets but some structural regulations
should be made.
Puschmann (2017), analzyed fintechs detailed. He defined fintechs as a
level of the evolution observed in digitization process. He discussed driver of
this evolution and concluded that changing role of IT, changing consumer
behavior, changing ecosystems and changing regulations are determinants of
this evolution. He considered fintech’s role as strategic as reducing the cost
of IT in financial services which consist of %20 of all costs and become largest
cost after labor costs. He emphasized that focus has shifted from intra-
organizational solutions to customer-oriented business-to-customer (B2C),
customer-to-customer (C2C) and provider-oriented business-to-business
(B2B) inter-organizational approaches.
Anne (2019), stated that fintech has disruptive impact on traditional
banking system thanks their cheaper, better and faster business models. She
pointed out that fintechs nowadays are beginning to offer some traditional
services such as payment services and loan allocation which are provided by
the traditional banks. This finding suggests that fintechs are becoming an
alternative to classic banking system. She defines fintechs are smaller but
more agile firms and claims that fintechs are support a wider diversity of
products and providers as well being better at providing more transparency
and advanced risk management system. She emphasized that thanks to all
these strength sides of fintechs, conventional financial institutions are more
interested to fintech’s growth process. She said that banks have already been
taking an active role in this process. Huge banks in traditional banking
system have been placing money to the sector. She found out that enormous
banks like Goldman Sachs, Citi, and JP Morgan Chase have a remarkable
investments in fintech offerings.

4. Fintechs
Fintech, which is a combination of the abbreviations of finance and
technology in English, are companies that produce technological solutions in
the financial sector as can be understood from its name.

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Although solutions such as online banking, which combines classical

banking with the internet, are among the first examples of fintech, in recent
years solutions and innovations have become more complex and bring
practical expansions to life. Our ability to pay online is also gathered under
the fintech umbrella, as well as cryptocurrency. So it makes no sense to draw
a strict boundary around fintech startups and the fintech ecosystem.
But wherever you put the start, fintech goes where modern technologies
take finance. We see the impact of these developments from individual finance
to high-level corporate application areas. For example, investment banking
also has a close relationship with fintech. In the near future, even fintech will
be able to provide investment advice with technologies that can analyze
extremely quickly and process data that cannot be processed by a human.
In figure 1. The most important examples of the fintechs are shown as
follows:
Figure 1. Fintechs around the World

Source: (Elgin, 2019).

The common features of Fintechs can be summarized as follows:

1- Offering many services offered by traditional banks in one dimension,
2- Having an innovation approach,
3- Being Agile,
4- Customer focused & oriented
5- Having a significant digital infrastructure

Fintechs, who are close to customers, gradually begin to offer customized

financial services to their customers thanks to the fact that they get to know
their customers very closely and move towards being a rival to classical
banking. One of the companies with this success story is Square. While
Square is a fintech company that starts with POS payment, it meets the other
needs of SMEs step-by-step including providing loans after reaching the SME
market.
It is possible to summarize the basic capabilities of the Square company,
the services it provides and the results it receives as shown in Figure 2 below.

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Figure 2. Square at a Glance

Value
Competencies and Proposition Value Proposition Products
Collaborations Products and and Services
Services
Square POS
Payment technology +2 mn Retailers
System
AI-supported credit assessment +7 mn Individual Users (Square
Square for Retail
(Credibility Analysis) Cash)
Broad SME Client Network Square Payroll
Square Capital 2018 3. Quarter
Square
Fintech Collaborations Adjusted Revenue : $ 431 mn
Installment
SimplyInsured, Guideline 401(k),
Square Cash Adjusted EBIDTA : $ 71 mn
Alice and AP Intego etc.
Payment Volume : $ 22,5 bn
$ 431 mn Loan to 49K
Customers
Average loan amount is $ 6,5K

Fintechs attract startup investments worldwide due to their

technological infrastructure and customer focused services. Chart 1 shows
the investment amounts raised by fintechs in the last 5 years.

Chart 1: Total Investment Activity in Fintechs

Total investment activity (VC, PE and M&A) in
3,000
fintech - mn $ 140,000
2,590
2,500 2,318 120,000
1,981 1,998
100,000
2,000
1,556 80,000
1,500
120,000 962 60,000
1,000
40,000
59,000 64,000
500 46,000 51,000
38,000 20,000

0 0

Deal Value Deal Count

Source: (Kpmg, 2019)

The steps followed by fintechs in their historical development process are

shown in Figure 3 as below.

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Figure 3. The Evolution of the Fintechs

Fintech
• Infrastructure
1.0

Fintech
• Banks
2.0
• Startups
Fintech
3.0
Fintech
• Techfins
4.0
Source: (Elgin, 2019).

According to many academics and market experts, nowadays when you

mention about fintech, in fact you mean fintech 3.0.
Although fintechs are growing so fast, there is a big problem they are
facing. These organizations are small organizations that accelerate existing
banking services. Therefore, customers have a trust problem in entrusting
their large sums of money. According to a research, only 7% of the
participants accepted to deposit their money in a fintech. This shows the trust
problem that fintechs have since they are relatively small organizations.
Because of this trust problem, fintechs act with the mentality of less money,
more customer. In other words, instead of receiving large amounts of money
from their large-volume customers, they are implementing a strategy of
receiving smaller-volume money from many relatively small customers.
Unlike traditional banking, Challenger banks are banks that offer limited
but specialist customer service in certain areas. The market share of these
banks has a growth potential. Seeing this potential, classical banks have
become investors of challanger banks. Also, challenger banks, which are
another alternative to classical banks, have a problem of accessing large
customer channels.
There is another player group in the industry that has the talent to solve
these two big problems, called Techfin.

5. Techfin
The concept called TechFin emerges with the attack of companies that
focus on technology, not companies with finance. Technology is very
important for finance, whether you are a small fintech venture or the ruler of
a huge bank, one of the most important things you need to do is invest in
technology. Obviously, bankers are good at running business and making
money. However, recently, technology companies have been successful.
Amazon, Alibaba, Apple, Facebook, Google, Baidu, Tencent ... All of these
companies are considered to have become TechFins. Although TechFins are

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not going to be substitute to the banks, they play a more serious and profound
role in customers' relationships with money.
Techfins come to the fore with the following features:
• Digital capabilities,
• Wide customer network,
• Focused on improving customer experience,
• Opportunities to expand their brands to banking
In figure 4. The most important examples of the techfins are shown as
follows:

Figure 4. Techfins around the World

The concept we call TechFin may be a new concept, but for example, the
digital bank MYbank established by Alibaba has been operating since 2015.
It is not a new decision for Alibaba to invest in this area as an e-
commerce firm. With a history that is almost as old as FinTech startups,
technology companies have an interest in finance. Or it is possible to give an
example to AliPay of Alibaba in the payment area.
Techfins' strengths can be summarized as follows:
• Customer confidence, amazon and paypal have been considered as
reliable and trustable institutions as much as banks.
• Access to mass customers,
Techfins collaborated with banks. Since techfins are naturally rivals of
retail banking, the banks they cooperate with are investment banks.
However, as the weakness of the techfins; as these organizations focus
heavily on customer experience, they don’t have enough financial knowledge
on innovative financial products. Therefore, they need to establish some
cooperation with banks or fintechs.

6. Fintech vs Techfin
Fintech, which is short form of financial technology. and it is the
integration of the financial system with technology and it aims to improve the
financial operations and process, it helps business and companies owners
and also consumers to follow their financial movement carefully , and the
following process happens by using some software’s and devices as phones
,laptops and some other smart devices Techfin, which is the short term of

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technology finance and it, refers to technology firms who aim to deliver
financial product with existing solutions, and famous example of Techfin
companies are amazon, Facebook, Google. FinTechs take the risk and have
been welcomed by millennial and customers who are ready to explore and
experience innovation. People who are ‘on the go’ and use the mobile platform
embrace transformation.
FinTechs are ready to disrupt existing processes and financial services
ecosystems with use of emerging technology. The limitations of FinTechs are
different as compared to TechFins.
Unlike TechFins, who have the limitation of huge credit risk, FinTechs
face the challenge of regulators. The global economic ecosystem has still not
completely accepted the way FinTechs work. There are rules and regulations
which they need to adhere to remain operational.
Another most critical hazard, which they are greatly exposed to, is Safety.
The chances of privacy risk and hacking always haunt them.
As there is a huge similarity between fintech and techfin, one thin line
makes a different between them, which we can explain fintech by taking
process to technology, but techfin has been explained as taking technology to
process
We can summarize the difference between fintech and techfin :
TechFin:
1. Process first approach.
2. The incumbent, usually large banks participate.
3. Improvise the existing process
4. Do not take the risk
5. Customers prefer legacy and trust
6. Enhance the proficiency of staff for the betterment of process using
technology
7. Huge credit risks
Fintech
1. Technology first is the approach.
2. Start-ups, usually participate
3. Follow transformation in the process
4. Do not hesitate in disrupting the existing process.
5. Youngsters, millennial and professionals appreciate them.
6. Eliminate the millennial for faster and superior experience.
7. Limitations of privacy, safety, and regulators.

7. Conclusion and recommendation

Both fintechs and techfins have strengths and weaknesses. Fintech are
good at meeting financial needs through customized solutions while they are
failing for public trust to attract huge money. They can work only minor
amount of money from a wider range of customers. In techfin side it is
observed that they are suffering to make innovative financial solutions but
thanks to their existing brand power and popularity, they can access to target
customer easier than fintechs.
Since they operate in the same sector, cooperation should be established
between these organizations instead of competition. By combining their
strengths they can obviously create mode added value for their target

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 PEARSON JOURNAL OF SOCIAL SCIENCES & HUMANITIES 2020

customers. In this respect, these organizations should not be seen as

competitors of each other, but as complementary organizations. Not only
between fintechs and techfins but also between these firms and traditional
banks, similar collaboration should be established. Traditional banks, based
on their significant reputation, huge accumulated capital power and huge
customer experiences, they can support fintechs and techfins. For this
reason, the relationship between these organizations is called coopetition in
the literature. In other words, it means to grow in a more balanced way by
cooperating with a competitor and thus being able to respond to customer
requests faster and more successfully. It can be concluded that in next future,
the firms which can survive from harsh and destructive competition will be
firms that are applying sustainable collaboration between fintechs, techfins
and traditional banks.

References
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Desai, F., (2015): The Evolution of Fintech,
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https://www.gartner.com/smarterwithgartner/separate-fintech-noise-from-
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Web Sites
www.sciencedirect.com
https://www.forbes.com/sites/falgunidesai/2015/12/13/the-
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